The 1950s and 1960s were a time of great economic prosperity and expansion of Welfare State. However, hardships and changes marked the following decade. This article explores how developed countries countered the new configuration of capitalism, showing how they were influenced by national institutions and by the welfare states regime. As a central point, the article shows that the new constraints did not lead to a convergence of strategies nor did they stymie the emergence of this type of State. The article focuses especially on the Scandinavian model and its ability to reconcile economic performance and equality, showing the role of corporativist practices and enhanced institutional capacity. In sum, the article discusses central points in the study of political economy in dealing with an essential aspect of the legitimacy of capitalism and in exploring the impact of institutions and showing that capitalism remains diverse.
Welfare State; institutions; neoliberalism; Scandinavian model; political economy